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A few weeks ago, I was interviewed by writer Melissa Neiman for a story on frugality. Well, I’m thrilled to say that her article, 6 Extreme Ways to Go Frugal and Save, is the top story on bankrate.com today. Please check it out, and learn how you can save $10,000 (or more) each year. If you’re going to save, you may as well save BIG — and this article shows you some fabulous ways to do so! Many thanks to Melissa for including me in this piece. I hope you enjoying reading it!
We must remember, however, that others may not be so lucky. Too many homeless are sleeping on streets tonight; too many children are going to bed hungry; and too many people are losing their struggle for survival due to a lack of basic medical care and supplies. Frugality isn’t only about pinching pennies and clipping coupons; it’s about prioritizing our spending so that it’s in line with our principles and values. It makes no sense to hoard every last dollar, when even just a few of them can make a significant difference in someone else’s life. Take a little time this week, and consider how you can incorporate charity into your frugal lifestyle. Whether you decide to help someone down the street, or halfway across the world, help someone. This simple act will make your life infinitely richer—and that’s what being a frugillionaire is all about. Here’s links to some of the larger charities, for your consideration: . Over the past year, mainstream interest in frugality has surged. People who never before hesitated to whip out their credit cards have been shunning retailers, clipping coupons, and making do with what they have. Many have been forced into this new lifestyle by job losses, underwater mortgages, and mounting debt. Others have embraced frugality to establish a safety net should the same thing happen to them. According to the Washington Post, however, the novelty of this new fiscal responsibility is wearing off—and some people are struggling with “frugal fatigue:” Frugality falling out of fashion?
It’s just like being on a crash diet—at first we feel righteous and noble nibbling our celery sticks, but then a sense of deprivation kicks in and that chocolate cake starts to look more enticing than ever. On the other hand, had we simply adopted a healthier way of eating—allowing for the occasional “treat”—it’s unlikely we’d feel the same temptation to be “bad.” It’s the same with our finances. When we quit spending cold turkey, all those things we “can’t have” start to look more and more attractive. And if we give in to temptation, there’s a real danger that we’ll overcompensate for our sense of deprivation—and end up with some serious debt. However, if we take a more balanced approach to our money management—making wise choices, but allowing an occasional indulgence on something that’s important to us—we’re much more likely to stick with the program. Frugality isn’t about depriving ourselves of ALL consumer goods. Rather, it’s about being more mindful of our money, and making sure that the way we spend it accords with our other goals in life. Suppose you love to eat out, but have decided to cut your restaurant expenses to save up for a down payment on a house. You’ve determined your priorities—homeownership is more important to you than dining out every week. However, that doesn’t mean you can’t indulge in the *occasional* restaurant meal. Such a “treat” every once in awhile won’t derail your home buying plans; plus, it’ll keep you from feeling deprived and falling off the wagon altogether. The key, really, is BALANCE. Doing things in moderation is always so much easier than taking extreme measures (and more likely to lead to success). If you’re living frugally, a well-considered expenditure won’t lay waste to your plans—on the contrary, it may very well help keep you on the path to your financial goals.
What can you do to avoid this terrible fate? Adopt a Pay-As-You-Go lifestyle. When you cut credit out of your life, you’ll put an end to the vicious cycle of debt. Instead of enriching banks and credit card companies with your monthly interest payments, you’ll be able to focus on building your own wealth. All it takes is a change in attitude, and shift in spending habits. Just follow these six Pay-As-You-Go Principles to dramatically transform your finances: 1. Save up for what you want. Don’t pay interest for instant gratification! When you buy something on credit, you’re overpaying for the privilege of having it immediately. Whether it’s a new dishwasher or trip to Disney World, make do without it until you have the cash. 2. Pay with cash. Cut up your credit cards, and use only cash—it’s the easiest and most effective way to put the brakes on overspending. It’ll also eliminate those expensive impulse purchases, since you’re unlikely to be carrying enough cash when the urge to splurge strikes. 3. Never carry a balance. If you must use a credit card (for example, to make an online purchase), pay off the balance in full each month. Carrying a balance is the worst blow you can deal to your personal finances—resolve to do everything in your power to avoid it. 4. Don’t finance a car. Make your car fit your budget, not the other way around. Instead of financing a flashy new convertible, save up your cash and settle for a used sedan. Until you have the funds, explore alternative transportation options like biking, public transit, and sharing rides with friends and family. 5. Borrow things instead of money. It’s always better to borrow an item, than borrow the money to buy it! Instead of running to the store the next time you need something (for example, a ladder to clean your gutters), ask friends or family if they have one to lend. 6. Rent seldom-used items. If you can’t find someone to lend you an item, consider renting it. If it’s a seldom-used item—like a camcorder, steam cleaner, or circular saw—it often makes better financial sense to pay for temporary use of it than to buy it. By nature, the Pay-As-You-Go strategy makes you live within your means—because without credit, you can’t spend any more than the cash you have on hand. Adopting such a plan will stabilize your finances and keep you out of debt. But if you really want to see results, take it one step further and live below your means. Embrace the challenge of living on less than your paycheck, and invest the remaining money. When you make interest work for you (instead of against you), you’ll be on the road to financial security!
Here are ten of my favorite frugality quotes. Heed these wise words, and you’ll be well on your way to becoming a frugillionaire! 1. “Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin 2. “He who does not economize will have to agonize.” – Confucius 3. “The safe way to double your money is to fold it over once and put it in your pocket.” – Frank McKinney Hubbard 4. “By sowing frugality we reap liberty, a golden harvest.” – Agesilaus 5. “Without frugality none can be rich, and with it very few would be poor.” – Samuel Johnson 6. “The way to wealth depends on just two words, industry and frugality.” – Benjamin Franklin 7. “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” – Will Rogers 8. “We make ourselves rich by making our wants few.” — Henry David Thoreau 9. “Frugality is one of the most beautiful and joyful words in the English language, and yet one that we are culturally cut off from understanding and enjoying. The consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things.” – Elise Boulding 10. “If you realize that you have enough, you are truly rich.” – Lao Tzu
2. You have a key to a public storage unit. The problem here is twofold: you spent a lot of money on things you don’t use, and you continue to waste money on storing them. The best course of action: sell the contents of the unit on Craigslist, eBay or at a garage sale, and hand over the keys! 3. It takes you more than an hour to clean your house. Consider if you really need all that square footage. Downsizing to a smaller abode can save you money in myriad ways: you’ll reduce your rent or mortgage payment, utilities, and the amount of stuff you need to buy to “fill” your space. 4. You have no idea what your tap water tastes like. Packaged drinks (like juice, soda, and bottled water) can do a number on your grocery budget. Quench your thirst with tap water instead—the recommended eight glasses of water a day cost only about $1 per year. 5. You often receive compliments on the color of your hair, toenails or fingernails. If you’re a regular at the salon, cut your visits in half—or better yet, eliminate them altogether! Have a spa day at home instead: light some candles, put on some relaxing music, and give yourself a DIY manicure or pedicure. 6. You think you’re too young/old/rich/poor/cool/busy to save for retirement. No excuses—everyone should be putting something away for when they’re old and gray. Make it automatic: have a certain amount from each paycheck deposited straight into savings. It’s an effortless way to achieve financial security! .7. There’s a fancy hood ornament on your car. A car is a means of transportation from point A to point B—not a reflection of your identity or success (as marketers would have you believe). Luxury cars are more expensive to purchase, maintain and insure. Sell that money-guzzler and instead of looking rich, be rich. 8. Your refrigerator is empty. When there’s no food in the house, it’s much too tempting to eat out (or stop for takeout). Action plan: make a menu for the week, shop with a grocery list, and stock your fridge with fresh food that’s easy to prepare. Consider cooking several meals at once and freezing them; they’ll be ready-to-eat on those nights when you’re too tired to cook. 9. You set foot in a shopping mall more than once last month. The best way to save money is to stay out of stores—it’s an incredibly easy way to preserve your wealth. And by all means, don’t shop for entertainment; limit your purchases to necessities, and spend your leisure time at the park instead. 10. You’re still paying off holiday credit card bills. You’ll have much happier holidays by heeding the following advice: never buy gifts on a credit card. Tailor your budget to the cash you have on hand. If you have little to none, don’t despair: give people handmade items, baked goods, or the gift of your time. It’ll be much more appreciated than anything bought in a store!
Multiple blogs and websites are encouraging their readers to tighten their belts and rein in excessive spending. Twenty-four-year-old Wang Hao, for example, has challenged visitors to his blog to limit their expenses to 100 yuan (about $14 USD) per week. Other sites facilitate the sharing of houses, dinners, and entertainment activities to help people cut costs. While the Chinese are traditionally frugal, the booming economy had engendered a more materialistic way of life among younger white-collar workers—many of whom would spend their entire paychecks on designer clothes, electronics and entertainment. With this recent downturn, they are rediscovering the virtue of thrift—and making frugality into a fashionable lifestyle. Thrifty lifestyles get popular in China
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As we gather with friends and family this holiday week, many of us will find that despite the hardships of this recession, we are truly blessed. If you’re reading this blog, it’s pretty likely you have a roof over your head, a warm place to sleep, and plenty of food on the table.
Let’s face it: consumer debt is one of the biggest obstacles to financial security. Carrying a balance on your credit card is a slippery slope: as finance charges accumulate, you slip deeper and deeper into debt—making it increasingly difficult to get your head above water.
Let’s take some time out today for a little inspiration (especially for those participating in the $100-A-Week Challenge!).
1. There’s a designer logo on your handbag, shoes or clothing. Don’t pay a premium to flaunt a famous name on your attire (they should be paying you for all that free advertising!). Many designer items are made in the same Chinese factories as less expensive goods. The only message those logos convey is that you paid too much.
Young Chinese professionals are embracing frugality as the global financial crisis threatens their country’s phenomenal economic growth.